PS Vita Has ‘Limited Appeal’ Thinks Pachter – Analyst Round-Up

February 21, 2012

The PS Vita is launching on the back of waning interest in Japan, and growing sales of Nintendo’s 3DS – as well as a buoyant mobile and tablet gaming market – which Wedbush Securities analyst Michael Pachter thinks will limit the PlayStation handheld’s appeal.

“I think it has limited appeal. It is clearly best in class for handhelds, but the handheld market is shrinking due to cannibalization from iOS and smartphones,” explained Pachter.

“I think the addressable market is probably half of its former size because of smartphones, so Vita and 3DS are destined to slug it out for scraps,” he added. “The Vita is really slick, but it costs the same as a PS3, so it is unlikely that anyone who doesn’t yet have a console will buy one. If a PS3 owner considers it, they will probably enjoy the interoperability with their console; 360 owners obviously less so.”

That means “wealthy hardcore gamers” will buy the PS Vita, said Pachter, adding that he’s unsure if it will “have as much appeal to parents with small children or to more casual gamers.”

Jesse Divnich agreed that the handheld market has changed, but remains optimistic about the PS Vita’s potential.

“I have high hopes for the PS Vita, both in Europe and North America,” he told NowGamer. “While in the past new hardware has been able to “fly” out of the gates, I believe that now hardware adoption and install base growth will be more conservative. I’d expect the Vita’s install base to grow at a similar rate to the growth in value of its software library.”

Mike Hickey meanwhile suspects that the PS Vita “could experience an accelerated launch cycle, similar to Nintendo’s 3DS platform,” but felt the high price could be a sticking point.

Eric Handler was also less sure the PS Vita would be a success. “I’m a bit skeptical about the Vita’s success,” he told us. “The device looks like it has some great features but the games content thus far looks ok, but not great. [It] needs some bigger titles to make the purchase more compelling, especially at its price point.”

In the long term, the Vita could struggle against the established mobile gaming market, Handler added. “Bigger picture, I think Vita as well as the 3DS have met with strong competition from smart phones and tablets. These devices have significantly changed the competitive landscape (and drove game price points much lower than previously seen on the DS and PSP). The Vita is definitely the technology leader but that doesn’t always make for the best selling product.”

PS Vita launches in the US and Europe this week – will it go the way of the 3DS or does it need a larger software library to be a success? Have your say below!